Open economies work better! Did Africa's protectionist policies cause its marginalization in world trade?

Francis Ng and Alexander Yeats

No 1636, Policy Research Working Paper Series from The World Bank

Abstract: In the mid-1950s sub-Saharan Africa accounted for 3.1 percent of global exports. By 1990 this share had fallen to 1.2 percent. The authors of this report find that Africa's extensive loss of competitiveness played a key role in its decline in world trade. If Africa had merely retained its 1962-64 OECD (Organization for Economic Cooperation and Development) market shares, its exports now would be 75 percent higher. Africa's problem was two-pronged: (1) it experienced declining market shares for its major export products, which, in turn, were of declining relative importance in world trade; and (2) it was unable to diversify its export base. Empirical evidence developed by the authors shows that external protection has not played a major role in this decline; in fact, OECD trade preferences gave Africa an advantage over many exporters. Trade restrictions and domestic policy interventions often create a bias against tradables, especially exports, that prevents the achievement of otherwise attainable growth rates. Import barriers in Africa are far higher than in developing countries with faster export growth, and appear to work against potential export products. If the region is to reverse its unfavorable export trends, it must adopt trade and structural adjustment policies that help make it competitive and help African exporters capitalize on foreign trade opportunities.

Keywords: Trade Policy; Economic Theory&Research; Environmental Economics&Policies; Earth Sciences&GIS; Export Competitiveness; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Economic Theory&Research; Environmental Economics&Policies; Trade Policy; Earth Sciences&GIS (search for similar items in EconPapers)
Date: 1996-08-31
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Citations: View citations in EconPapers (21)

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Journal Article: Open economies work better! did Africa's protectionist policies cause its marginalization in world trade? (1997)
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